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Africa’s Private Sector: A source of Growth and Innovation, and a Powerful tool for Tackling Fragility

Written by SOFIA CARRONDO | Dec 20, 2024 10:53:22 AM

 

An interview with INCAS Peace Practice Lead Sofia Carrondo

The innovation of Africa’s private sector was on full display during the 5th edition of the Choiseul Forum in Marrakech, which INCAS Peace Practice Lead Sofia Carrondo attended recently, she tells us.

The forum put forward a vision of Africa-led, continent-wide development that prioritises local capacity building – all of which is positive and exciting, Sofia says. But lingering in the background was the question of fragility, which affects countries across the continent. In particular, the role of private sector actors in tackling fragility could have been discussed in more detail.

We sat down with Sofia to understand how some of the ideas in the forum complement INCAS’s approach, what kinds of risks fragility poses, and how these could be tackled. She points out that there is a real opportunity to build upon the innovation of African firms and their focus on capacity building. Ultimately, these companies could play a key contributory role in building more stable societies, through direct, deliberate, and planned engagement to reduce fragility.

Here are edited excerpts of our conversation:

Q: Can you tell us a bit more about the Choiseul Forum and what you liked about it?

Sofia: The forum showcased the undeniable potential and diversity of Africa, emphasising the necessity of acceleration measures to foster growth. It brought together an estimated 600 decision-makers from Africa, Europe, and the Gulf to discuss strategic issues and promote high-level partnerships for the benefit of African economies.

As a vehicle to showcase innovative African businesses working on locally tailored approaches and business models, it clearly demonstrated the value of having a space where the private sector can explore opportunities throughout the whole continent.

Q: How would you relate this to INCAS’s work?

Sofia: These themes fully align with INCAS’s strategic objectives and partnership model, which relies on a local network of experts offering in-depth knowledge of their respective contexts. Through this, we combine our global expertise with local insight, strengthening our commitment to local capacity building. Our partnerships also include training for our partners, according to specific need.

Public-private partnerships are central to our approach. As a company whose clients span both the public and private sectors, we effectively bridge the two spheres. This approach is impactful in a range of areas, including in our work on social impact, peace, security, human rights, and monitoring and evaluation.

At INCAS, we advocate for the private sector to be involved, as a critical player, in the efforts to address fragility. A holistic approach that involves all socio-economic actors is crucial, with businesses playing a vital role. Our experience shows that, when business adopt and integrate an in-depth understanding of fragility factors into their activities, they can go beyond do-no-harm to generate a positive impact. This includes analysing local tensions and cohesion opportunities across all operations.

Q: It sounds like one challenge facing Africa is that there’s great potential sitting alongside great fragility. Could you outline the scale of that?

Sofia: Fragility is a key challenge for many African countries. And social, institutional, and political fragility does ultimately impact every economic sector and actors in society – private sector included.

According to the Fragile States Index by The Fund for Peace, over half of Africa’s 54 countries are considered “fragile” to varying degrees, with vulnerability factors related to political instability, poverty, and internal conflicts. When it comes to social cohesion, most African countries have fragility that extends horizontally (within society) and vertically (in the relationship between society and state).

In sub-Saharan Africa, 26 countries were classified as being in a state of “alert” or “high alert” in 2023. The region faces numerous armed conflicts, particularly in the Sahel, where violent attacks by non-state armed groups have increased by over 70% in the past five years. Countries such as Mali, Niger, Sudan, and Somalia are among the most affected, with fragility reflected in weakened social cohesion, eroded state structures, and rising forced displacement.

Fragility extends beyond armed conflicts. Economic crises, food insecurity, and climate disasters further exacerbate vulnerability. For example, around 346 million people in Africa suffer from malnutrition, worsened by climate shocks and the impacts of climate change. This food insecurity is a key fragility factor in many regions of Africa, threatening both stability and economic growth.

Q: And what does addressing fragility look like?

Sofia: Successful approaches to address fragility must be tailored to the context at hand and the influence of the actors involved. Experience shows, for instance, that a holistic approach might be employed after a conflict or a major upheaval – combining political, social, and economic actions to tackle fragility. In other instances, a more focused approach may be used, centred on a specific situation. This can include examining prominent narratives in both social and traditional media, to understand their provenance and, where necessary, how to counter them. Or if you’re aiming to tackle violent extremism, understanding the push and pull factors that drive it and devising actions to tackle those things.

The main aspect is a strong analysis of actors and context, and dialogue and partnership between all actors involved. Effective approaches combine governance, dialogue, and counterpart ownership. Proper stakeholder identification and engagement from the outset is a crucial element leading to a successful initiative. The understanding of stakeholder interests and their interpretation of stability is also essential. This does not look the same to each stakeholder.

Q: So, how does this all translate into private sector action?

Sofia: The private sector has a substantial, positive role to play when it comes to promoting stability and tackling fragility. Being an economic actor also means being a social actor – any interaction a company has within a particular context is never really “neutral,” even if the company aims at neutrality. Interactions can be positive, not damaging, or extremely damaging and we should all aim to positively contribute to the societies we interact with. Stability contributes to smoother operations and the success of private companies.

The awareness of the important role that the private sector can play in this field has grown in recent decades and has permeated different industries and, particularly, larger companies. Efforts must continue to ensure that this awareness and the tools to act on it continue to be promoted and are brought to small and medium-sized companies, together with approaches that are commensurable to their means.

Ideally, private and public sector counterparts – including communities – would work together to agree on a shared understanding of stability as a concept, before laying out some goals, allocating resources, and deciding on a combination of activities that could produce short-term results and ones that could bring about more deep-rooted changes.

Currently, we’re seeing quite a lot of space and appetite from the private sector to invest in tackling problems rooted in underlying fragility. But there’s a strong business case to be made for allocating investment to tackle fragility at the outset of company operations, addressing the root causes of fragility factors rather than just tackling the problems they produce. In this way, the investment would form a part of a company’s risk management strategy, contributing to their risk management systems and assisting in mitigating potential reputational or economic risk.

Q: Does INCAS potentially have a bigger contributory role to play in this process, too?

Sofia: INCAS is proud to participate in discussions on African solutions to the continent’s challenges. We remain committed to actively contributing to strategic reflections and their implementation, supporting Africa’s sustainable and inclusive development. With over 20 years of experience in tackling fragility in multiple contexts, we stand ready to support an Africa-led dialogue that takes the opportunity to address the challenges of fragility felt across the continent.

Our newly launched initiative, Strategic Resolve, leverages our deep expertise and proven capabilities in conflict resolution and mediation, equipping our clients to manage and resolve conflicts sustainably. Strategic Resolve marks our concerted effort to provide immediate solutions to problems while laying the groundwork for more in-depth work to tackle their root causes.